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Commonwealth DPP to undertake HIH Criminal Prosecutions

NO.058

COMMONWEALTH DPP TO UNDERTAKE HIH CRIMINAL PROSECUTIONS

The Treasurer, Peter Costello and the Attorney General, Daryl Williams
today announced the Government's decision that the Commonwealth Director
of Public Prosecutions (CDPP) will undertake criminal prosecutions relating
to the financial collapse of the HIH Insurance Group. This will include
criminal prosecutions under the Corporations Act and the Crimes Act (NSW).

A key task of the HIH Royal Commission was to inquire into the possibility
of breaches of law and whether possible criminal or other legal proceedings
should be referred to the relevant agency. In releasing the Commissioner's
report on 16 April the Government immediately referred all possible breaches
of the Corporations Act to the Australian Securities and Investment Commission
(ASIC) and breaches of the NSW Crimes Act to the NSW Director of Public
Prosecutions.

The Government sought the advice of the CDPP and ASIC and has accepted
their recommendation that the CDPP is the most appropriate and effective
body to undertake HIH criminal prosecutions. The powers of the CDPP are
extensive and provide the best opportunity for the efficient prosecution
of HIH cases. The CDPP has the power to prosecute offences against the
Corporations Act, to grant indemnities to witnesses, to appeal against
sentences and other matters following completion of the prosecution and,
under arrangements with the States, to prosecute State offences.

A specialised unit will be established within the CDPP and will be staffed
by people experienced in the prosecution of complex commercial cases.
The unit will be dedicated solely to the pursuit of HIH matters. The
specialised unit will be assisted by two Senior Counsel and two Junior
Counsel retained from the bar who will advise on matters referred to
the CDPP by ASIC. A taskforce has already been established within
ASIC to examine prosecutions and prepare briefs for possible proceedings.
The Government expects these two agencies to work closely on investigating
and prosecuting possible breaches arising from the failure of the HIH
Insurance Group.

The Government intends to allocate additional funding of $14 million
over three years to the CDPP to undertake criminal prosecutions. ASIC
has already been provided with additional funding of $17.5 million in
2003-04 and $10.7 million in 2004-05 to undertake this task.

The Government has also ensured that ASIC is able to efficiently and
expeditiously investigate possible breaches of the law by legislating
to transfer the records of the HIH Royal Commission to ASIC.
The legislation maintains key protections that currently attach to the
Royal Commission records, such as the protection of individuals against
self-incrimination and rights to claim legal professional privilege.